The effects of Covid-19

The coronavirus pandemic has caused devastating effects both to the health sector businessthe financial world. The wake of the disease has seen many nations debt-stricken to being incapacitated to sustain the economy. The United States of America, in relation to an article posted on the Wall Street Journal titled, U.S. Debt Is Set to Exceed Size of the Economy Next Year, a First since World War II, is one of the victims of the pandemic. The article entails the massive emergency expenditure that the government has undergone to fulfill the virus’s precautionary measures. Besides, the country’s GDP has been shrinking significantly, seeing that many businesses have ended up shutting down.

The article is relevant to international business management since it elucidates how the government allocates its budget to ensure that its business endeavors still run. The article also outlines that other countries, such as Japan, Italy, and Greece, have suffered economic losses due to the coronavirus. This comparison shows the effect of a global pandemic on the international business seeing that commercial activities that are the main contributors to the GDP are shut down in such periods. Moreover, the article explains to us how international borrowing is carried out by emphasizing that despite the looming debt burdens, the USA is still in a position to get loans from trading partners and other global organizations. This explains the role of the international organizations in ensuring the continuity of international business during crises.

Prior to the reading, I had a belief that in case a country’s debt exceeds the GDP, it is declared bankrupt since most of its economic activities are crippled. However, upon reading this article, much light was shed on how, despite being debt-stricken, the country can sustain its economy with more information on international investment, borrowing, and interests levied on loans.